State Small-Business Exchanges Still Aren't Ready

Porche Lovely of Denver attempted to enroll in a health-care plan through her state's new insurance exchange Tuesday because her employer doesn't offer health benefits.

Her employer? Porche Lovely.

Among the 22 million Americans expected to sign up for health insurance through the new state exchanges over the next two years are owners of micro businesses—companies with just a few or no employees.

ENLARGE

Porche Lovely, owner of a cupcake business in Denver, is looking to buy a health plan through her state's new insurance exchange.
Polixenni Photography

But on Tuesday, the day the exchanges were supposed to begin accepting applications via the Web, technical glitches prevented many individuals from signing up, including Ms. Lovely, who owns a cupcake shop with three part-time employees.

Ms. Lovely says she hasn't had health insurance since 2004, when she was laid off from a large technology company where she worked as a project manager. She tried to buy insurance on her own but says she was denied because of a thyroid condition. She also says she nearly died two years ago from the H1N1 virus because she didn't want to rack up hospital bills going to the emergency room.

Ms. Lovely tried Tuesday to enroll in a health plan online through her state's insurance exchange but couldn't because the site was overloaded. "I just think it shows the demand for this is strong," she says. "I'll enroll as soon as I can."

Ms. Lovely, 39 years old, did make some progress. She called a toll-free number for help and says a customer-service representative gave her an overview of the exchange's plans and prices and promised to email her the information. As of Wednesday afternoon, however, the email had yet to arrive.

It is common for micro businesses to lack small-group insurance plans. According to the Kaiser Family Foundation, 55% of the companies with three to nine employees don't offer health benefits. The main reason: cost. The average annual premium for a single worker is $5,884, up 74% from a decade ago, Kaiser says.

As an alternative to the individual exchanges, micro businesses will be able to buy group insurance through new small-business exchanges in every state. Those exchanges were supposed to begin accepting online-enrollment applications Tuesday, but Obama administration officials announced last week that they won't be ready until early November.

Private insurers will be participating in both the individual and small-business exchanges, but in some states only a few have signed up. Coverage options and prices will vary by state.

Rami Essaid, the chief executive of a Web-security business in Arlington, Va., was expecting to check out his state's small-business exchange this week to see if it has group plans that are more affordable than the one his company has now. He pays all the premiums for a plan that covers his 14 employees but not their dependents.

"It is hard for us to cover families as a young company," says Mr. Essaid, whose firm, Distil Networks Inc., was formed in 2011.

Now that he won't be able to shop for coverage through his state's small-business exchange right away, he plans to renew the current health-insurance plan. Though it doesn't expire until February, he negotiated an option through his broker to renew it in December, because he expects premiums to rise next year.

"The less time we have to understand our options, the less likely we'll drop our existing care and switch over to a new group plan on the exchange," says Mr. Essaid. "We don't want to make a rush decision."

Nate Schmidt, co-founder and CEO of a software company in Birmingham, Ala., says a small-group health plan is too expensive for his firm, which is five years old and has just four employees. So he has focused on the individual exchange rather than the small-business exchange. He's now on a Blue Cross Blue Shield plan that covers him, his wife and their three children, and he says it costs $420 a month, plus a $4,500 deductible, $40 copayments for routine doctor visits and $60 for specialists.

Mr. Schmidt, 39, says it has been a struggle to find a decent, affordable plan for his family. They were denied coverage by a major provider a few years ago, he says, because his wife has a minor skin condition.

Mr. Schmidt had hoped to shop on his state exchange's website to see if he could get a better deal for his family, but it wasn't working properly.

"I own a technology company and I know how hard it is to roll out software, so I'm not shocked," he says. "On the other hand, the stakes seem high for [the government] to get it right."

I had had the same issues with my two person company; group health issue was too expensive and in fact was not available at various times so I switched to individual health insurance plans for myself and my assistant. Unfortunately, I can not provide health insurance for her children so she is going through a plan called Florida Kids Care, which actually works very well. In turn, I am fortunate that I am divorced with no children so my costs are pretty reasonable and I pay for a personal physician which acts to reduce my deductable. From what I can see the Affordable Care Act is only going to raise my rates without providing better coverage; I am unsurprised as none of our so called political leaders have a clue on how anything actually works.

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